The Indian footwear industry has recorded massive growth over the past few years, and this trend is expected to continue well into the future. According to estimates, the global leather footwear demand is estimated at 86% of the total footwear consumption. A 2030 report by the global footwear market suggests that there is expected to be a 14.86% growth in footwear demand between 2022 to 2030.
What’s more, India’s non-leather footwear industry will soon cross the $6 billion mark by 2024.
But in reality, any discussion about the upward trend in the footwear industry shall remain incomplete without discussing the role of FDI and giving it due credit.
What is FDI?
According to Business Standard*, Foreign Direct Investment (FDI) is when a company takes controlling ownership of a business entity in another country, getting directly involved with their day-to-day operations.
As a footwear manufacturer, receiving FDI means you associate with a company that brings you money and provides their skills, expertise, technical know-how and assistance.
What customers desire?
In these times, footwear customers are looking for high-quality products, the latest technology, and lots of variety and occasion wear footwear to enhance their look and offer utmost comfort. It requires footwear manufacturers to innovate and offer the best features and trends.
The government’s FDI approval.
One step that has opened doors to numerous possibilities for footwear manufacturers in India is the government’s approval of FDI. Companies in another country can now directly and automatically invest in an Indian footwear business based in India.
Such a move on the government’s part means footwear manufacturers have more opportunities to grow. With FDI, you can expand the scope of your business, associate with larger experienced companies and benefit from their expertise.
Benefits of FDI and why you should make the most of it.
The retail market in India is expected to reach $1.3 trillion by 2030 according to a report by Boston Consulting Group and the Retailers Association of India.** This puts the compound annual growth rate (CAGR) between 9-11%. Such growth in Indian retail is a reason to rejoice for both companies and international investors.
So what are the advantages of FDI?
- Foreign Reach: When you partner with an international firm or foreign investor, you automatically expand your reach to offshore markets. Your products start getting recognition, and more people come to know about your brand. Your revenues start growing too, which is always a big plus.
- Growth in Production Capacity and Tech Knowledge: Having a foreign investor by your side means that you get access to the latest and most modern techniques and technologies. It’s your chance to pull out all the stops and take your business to the next level with enhanced outputs.
- Streamlined Growth and Expansion: Partnering with a foreign investor gives you opportunities to grow your business at a faster pace.
- Better Products for Customers: When you gain expertise and skills working with a foreign investor, the quality and features of your products improve and these benefits get transferred directly to your customers.
[*]https://www.business-standard.com/about/what-is-fdi
CONCLUSION
Foreign direct investment (FDI) is giving the footwear industry and manufacturing units a positive uplift, especially after the financial impact of the pandemic. It is time for footwear manufacturers to make the most of these opportunities to diversify and grow their businesses.
